TY - JOUR A1 - Edenhofer, Ottmar A1 - Franks, Max A1 - Kalkuhl, Matthias T1 - Pigou in the 21st century BT - a tribute on the occasion of the 100th anniversary of the publication of The Economics of Welfare JF - International tax and public finance N2 - The year 2020 marks the centennial of the publication of Arthur Cecil Pigou's magnum opus The Economics of Welfare. Pigou's pricing principles have had an enduring influence on the academic debate, with a widespread consensus having emerged among economists that Pigouvian taxes or subsidies are theoretically desirable, but politically infeasible. In this article, we revisit Pigou's contribution and argue that this consensus is somewhat spurious, particularly in two ways: (1) Economists are too quick to ignore the theoretical problems and subtleties that Pigouvian pricing still faces; (2) The wholesale skepticism concerning the political viability of Pigouvian pricing is at odds with its recent practical achievements. These two points are made by, first, outlining the theoretical and political challenges that include uncertainty about the social cost of carbon, the unclear relationship between the cost-benefit and cost-effectiveness approaches, distributional concerns, fragmented ministerial responsibilities, an unstable tax base, commitment problems, lack of acceptance and trust between government and citizens as well as incomplete international cooperation. Secondly, we discuss the recent political success of Pigouvian pricing, as evidenced by the German government's 2019 climate policy reform and the EU's Green Deal. We conclude by presenting a research agenda for addressing the remaining barriers that need to be overcome to make Pigouvian pricing a common political practice. KW - Environmental economics KW - Climate change economics KW - Carbon pricing KW - Pigouvian taxation KW - Economic policy Y1 - 2021 U6 - https://doi.org/10.1007/s10797-020-09653-y SN - 0927-5940 SN - 1573-6970 VL - 28 IS - 5 SP - 1090 EP - 1121 PB - Springer CY - Dordrecht ER - TY - JOUR A1 - Edenhofer, Ottmar A1 - Kalkuhl, Matthias A1 - Ockenfels, Axel T1 - Das Klimaschutzprogramm der Bundesregierung BT - eine Wende der deutschen Klimapolitik? JF - Perspektiven der Wirtschaftspolitik N2 - Das Klimaschutzgesetz hat einen Paradigmenwechsel eingeleitet: den Einstieg in eine CO2-Bepreisung als künftiges Leitinstrument der Klimapolitik. Auf den ersten Blick ist der CO2-Preis unter einer Fülle von Fördermaßnahmen und ordnungsrechtlichen Regelungen verschüttet, deren Wirksamkeit und Kosten höchst unsicher sind. Der CO2-Preis ist aber so angelegt, dass er langfristig das dominante Instrument einer europäisch harmonisierten Klimapolitik werden kann. Der angedeutete Paradigmenwechsel der deutschen Klimapolitik öffnet damit die Tür, die europäische und internationale Kooperation zu stärken. Dazu ist es aber notwendig, neben der europäischen auch die globale Klimapolitik neu auszurichten. Auch dort sollten sich die Verhandlungen statt auf nationale Mengenziele auf CO2-Preise konzentrieren. Die erforderliche Kooperation wird möglich, wenn die Regierungen Transferzahlungen strategisch und reziprok nutzen. So könnte die Effektivität der Klimapolitik erhöht werden und es ließen sich die entstehenden Verteilungskonflikte entschärfen. KW - Klimaschutzgesetz KW - CO2-Preis KW - Emissionshandel KW - internationale Kooperation KW - Klimawandel KW - Klimapolitik KW - Deutschland KW - EU Y1 - 2020 U6 - https://doi.org/10.1515/pwp-2020-0001 SN - 1465-6493 SN - 1468-2516 VL - 21 IS - 1 SP - 4 EP - 18 PB - De Gruyter CY - Berlin ER - TY - JOUR A1 - Edenhofer, Ottmar A1 - Kalkuhl, Matthias A1 - Requate, Tilman A1 - Steckel, Jan Christoph T1 - How assets get stranded BT - the impact of climate policy on capital and fossil fuel owners : introduction to the JEEM special section on climate policy and political economy JF - Journal of environmental economics and management N2 - Internalizing external costs of carbon is a fundamental goal of climate policy. Since the seminal work of Arthur Pigou in 1920, economic theory has analyzed the efficiency gains arising from various instruments that internalize externalities and lead to Pareto-improvements. It is widely recognized in environmental economics that a carbon price would effectively reflect the scarcity of the atmospheric disposal space for carbon depending on the temperature target that is to be achieved. The question of how to organize the transition process, i.e. moving from inefficient to efficient allocations, and implementing the necessary policies, has gained increasing attention in recent years. Arguably, the transition process is tightly interwoven with political processes that include complex interactions between societal stakeholders, such as households and firms, on the one hand, and political decision makers, on the other. Accordingly, understanding political-economy aspects of the transition process, including distributional outcomes, is becoming increasingly relevant. While a growing literature discusses the distributional implications of climate policy on households, it is less well understood how asset owners might be affected by climate policy and how these potential impacts would interact with the transition process. This Special Section focuses on public policy challenges related to this transition problem, with special emphasis on asset owners. A core theme is the special role of stranded assets, i.e. a devaluation of capital stocks or financial assets either by introducing a stringent carbon price or by omitting a pre-announced policy of this kind. Y1 - 2020 U6 - https://doi.org/10.1016/j.jeem.2020.102300 SN - 0095-0696 SN - 1096-0449 VL - 100 PB - Elsevier CY - Amsterdam ER - TY - JOUR A1 - Edenhofer, Ottmar A1 - Kalkuhl, Matthias A1 - Roolfs, Christina T1 - Carbon pricing and revenue recycling BT - an overview of vertical and horizontal equity effects for Germany JF - CESifo forum Y1 - 2021 UR - https://www.cesifo.org/DocDL/CESifo-Forum-2021-5-edenhofer-kalkuhl-roolfs-carbon-pricing-september.pdf SN - 2190-717X SN - 1615-245X VL - 22 IS - 5 SP - 10 EP - 14 PB - Ifo CY - Munich ER - TY - RPRT A1 - Kalkuhl, Matthias A1 - Amberg, Maximilian A1 - Bergmann, Tobias A1 - Knopf, Brigitte A1 - Edenhofer, Ottmar T1 - Gaspreisdeckel, Mehrwertsteuersenkung, Energiepauschale BT - wie kann die Bevölkerung zielgenau und schnell entlastet werden? Y1 - 2022 UR - https://www.mcc-berlin.net/fileadmin/data/C18_MCC_Publications/2022_MCC_Gaspreise_und_Entlastungsma%C3%9Fnahmen.pdf PB - Mercator Research Institute on Global Commons and Climate Change (MCC) gGmbH CY - Berlin ER - TY - JOUR A1 - Kalkuhl, Matthias A1 - Edenhofer, Ottmar T1 - Ramsey meets Thünen BT - the impact of land taxes on economic development and land conservation JF - International tax and public finance N2 - Land taxes can increase production in the manufacturing sector and enhance land conservation at the same time, which can lead to overall macroeconomic growth. Existing research emphasizes the non-distorting properties of land taxes (when fixed factors are taxed) as well as growth-enhancing impacts (when asset portfolios are shifted to reproducible capital). This paper furthers the neoclassical perspective on land taxes by endogenizing land allocation decisions in a multi-sector growth model. Based on von Thünen’s observation, agricultural land is created from wilderness through conversion and cultivation, both of which are associated with costs. In the steady state of our general equilibrium model, land taxes not only may reduce land consumption (associated with environmental benefits) but may also affect overall economic output, while leaving wages and interest rates unaffected. When labor productivity is higher in the manufacturing than in the agricultural sector and agricultural and manufactured goods are substitutes (or the economy is open to world trade), land taxes increase aggregate economic output. There is a complex interplay of conservation policy, technological change and land taxes, depending on consumer preferences, sectoral labor productivities and openness-to-trade. Our model introduces a new perspective on land taxes in current policy debates on development, tax reforms as well as forest conservation. KW - Structural shift KW - Structural change KW - REDD KW - Henry George KW - Forest conservation KW - Sustainability KW - Johann Heinrich von Thunen Y1 - 2016 U6 - https://doi.org/10.1007/s10797-016-9403-6 SN - 0927-5940 SN - 1573-6970 VL - 24 SP - 350 EP - 380 PB - Springer CY - Dordrecht ER - TY - RPRT A1 - Kalkuhl, Matthias A1 - Flachsland, Christian A1 - Knopf, Brigitte A1 - Amberg, Maximilian A1 - Bergmann, Tobias A1 - Kellner, Maximilian A1 - Stüber, Sophia A1 - Haywood, Luke A1 - Roolfs, Christina A1 - Edenhofer, Ottmar T1 - Effects of the energy price crisis on households in Germany BT - socio-political challenges and policy options Y1 - 2022 UR - https://www.mcc-berlin.net/fileadmin/data/C18_MCC_Publications/2022_MCC_Effects_of_the_energy_price_crisis_on_households.pdf PB - Mercator Research Institute on Global Commons and Climate Change (MCC) gGmbH CY - Berlin ER - TY - RPRT A1 - Kalkuhl, Matthias A1 - Flachsland, Christian A1 - Knopf, Brigitte A1 - Amberg, Maximilian A1 - Bergmann, Tobias A1 - Kellner, Maximilian A1 - Stüber, Sophia A1 - Haywood, Luke A1 - Roolfs, Christina A1 - Edenhofer, Ottmar T1 - Auswirkungen der Energiepreiskrise auf Haushalte in Deutschland BT - sozialpolitische Herausforderungen und Handlungsoptionen Y1 - 2022 UR - https://www.mcc-berlin.net/fileadmin/data/C18_MCC_Publications/2022_MCC_Auswirkungen_der_Energiepreiskrise_auf_Haushalte.pdf PB - Mercator Research Institute on Global Commons and Climate Change (MCC) gGmbH CY - Berlin ER - TY - JOUR A1 - Kalkuhl, Matthias A1 - Steckel, Jan Christoph A1 - Edenhofer, Ottmar T1 - All or nothing BT - climate policy when assets can become stranded JF - Journal of environmental economics and management N2 - This paper develops a new perspective on stranded assets in climate policy using a partial equilibrium model of the energy sector. Political-economy related aspects are considered in the government's objective function. Lobbying power of firms or fiscal considerations by the government lead to time inconsistency: The government will deviate from a previously announced carbon tax which creates stranded assets. Under rational expectations, we show that a time-consistent policy outcome exists with either a zero carbon tax or a prohibitive carbon tax that leads to zero fossil investments - an "all-or-nothing" policy. Although stranded assets are crucial to such a bipolar outcome, they disappear again under time-consistent policy. Which of the two outcomes (all or nothing) prevails depends on the lobbying power of owners of fixed factors (land and fossil resources) but not on fiscal revenue considerations or on the lobbying power of renewable or fossil energy firms. KW - Climate policy KW - Optimal control KW - Political economy KW - Public finance KW - Credible policy KW - Time inconsistency Y1 - 2020 U6 - https://doi.org/10.1016/j.jeem.2019.01.012 SN - 0095-0696 SN - 1096-0449 VL - 100 PB - Elsevier CY - San Diego ER - TY - JOUR A1 - Sureth, Michael A1 - Kalkuhl, Matthias A1 - Edenhofer, Ottmar A1 - Rockström, Johan T1 - A welfare economic approach to planetary boundaries JF - Jahrbücher für Nationalökonomie und Statistik N2 - The crises of both the climate and the biosphere are manifestations of the imbalance between human extractive, and polluting activities and the Earth’s regenerative capacity. Planetary boundaries define limits for biophysical systems and processes that regulate the stability and life support capacity of the Earth system, and thereby also define a safe operating space for humanity on Earth. Budgets associated to planetary boundaries can be understood as global commons: common pool resources that can be utilized within finite limits. Despite the analytical interpretation of planetary boundaries as global commons, the planetary boundaries framework is missing a thorough integration into economic theory. We aim to bridge the gap between welfare economic theory and planetary boundaries as derived in the natural sciences by presenting a unified theory of cost-benefit and cost-effectiveness analysis. Our pragmatic approach aims to overcome shortcomings of the practical applications of CEA and CBA to environmental problems of a planetary scale. To do so, we develop a model framework and explore decision paradigms that give guidance to setting limits on human activities. This conceptual framework is then applied to planetary boundaries. We conclude by using the realized insights to derive a research agenda that builds on the understanding of planetary boundaries as global commons. KW - cost-benefit analysis KW - cost-effectiveness analysis KW - global commons KW - planetary boundaries KW - precautionary principle KW - shadow price KW - uncertainty KW - welfare economics Y1 - 2023 U6 - https://doi.org/10.1515/jbnst-2022-0022 SN - 0021-4027 SN - 2366-049X VL - 243 IS - 5 SP - 477 EP - 542 PB - De Gruyter Oldenbourg CY - Berlin ER -